Judge: City of LA Can Audit Secretive DWP Trusts

LOS ANGELES (CNS) - A judge today cleared the way for City Controller Ron Galperin to audit two trusts linked to the Department of Water and Power employee union in order to see how an estimated $40 million in taxpayer money was spent.

Los Angeles Superior Court Judge James Chalfant denied a request by the International Brotherhood of Electrical Workers, Local 18, which represents DWP workers, and union chief Brian D'Arcy to block subpoenas issued by Galperin's office in January.

“This is all about knowing where your money went,” Chalfant said. “I don't see how the city controller doesn't have that authority.”

Chalfant wrote in a tentative decision -- which he later finalized -- that Galperin has the authority to “perform an audit of the trusts at any time to determine if public money from the DWP is being spent legally, and for future reference by the City Council. The subpoenas also are valid, and the petition, styled as a motion to quash, is denied.”

The subpoenas demanded that the Joint Safety Institute and the Joint Training Institute furnish financial documents as part of an audit being conducted by Galperin's office in response to questions raised over whether the funds were properly spent.

Los Angeles County District Attorney Jackie Lacey's office also is investigating the trusts.

Galperin's subpoenas order D'Arcy to appear for an audit interview and to provide “support documents” for expenses made on salary, training workshops, travel and conference, office and other items listed in the trusts' general ledger and tax forms.

D'Arcy, who has refused to turn over the documents, contended that the trusts are independent of the city and are not required to open their financial books to the controller.

The Joint Training Institute and the Joint Safety Institute, which were formed to smooth relations between DWP workers and management, have received about $4 million annually from the DWP's coffers over the past decade.

The trusts are governed by a board made up of both union and DWP representatives and the money is supposed to be spent on worker safety and training.

D'Arcy's attorney, D. William Heine, argued that the DWP representatives on the board know if the monies are being used properly. He also said the agency's general manager, not the city controller, should conduct any probes into allegations of misuse of funds.

Heine said there also is no evidence the City Council supports Galperin's subpoena efforts.

But Assistant City Attorney Valerie Flores said the job of looking after the trust funds is indeed delegated by the City Council to the controller.

“The City Council has decided it wants the controller to follow the funding,” Flores said. “The laws of the city allow the controller to monitor and safeguard the funds.”

Flores said such authority by the controller does not conflict with the City Charter.

Chalfant denied a request by Heine to put a stay on his order pending an appeal. The judgment becomes final April 22.

City Attorney Mike Feuer called the judgment a “terrific result for the ratepayers of Los Angeles who are about to receive transparent analysis of where their dollars have gone that they've deserved for a long time.”

Galperin added, “Today is an important victory for transparency and an important step in holding accountable those who think they are above the law. What we have is a judge who agreed with us, thankfully, that ratepayers of the city of Los Angeles have a right to know how money has been spent in these two trusts.”

D'Arcy has 10 business days from the finalization of the judgment, or until May 6, to submit the subpoenaed documents, Feuer said.